Alexandria Real Estate Equities, Inc 8-K, filed May 3, 2004
Alexandria Real Estate Equities, Inc. (ARE)
About this 8-K
Alexandria Real Estate Equities, Inc filed this 8-K on May 3, 2004.
Items reported
- Item 12
- Item 7
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 3, 2004
ALEXANDRIA REAL ESTATE EQUITIES, INC.
(Exact name of registrant as specified in its charter)
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135 North Los Robles Avenue, Suite 250
Pasadena, California 91101
(Address of principal executive offices including zip code)
(626) 578-0777
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated May 3, 2004
Item 12. Results of Operations and Financial Condition
On May 3, 2004, we issued a press release entitled "Alexandria Real Estate Equities, Inc. Reports First Quarter 2004 Results" which sets forth our results of operations for the first quarter ended March 31, 2004. A copy of that press release is attached hereto as Exhibit 99.1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ALEXANDRIA REAL ESTATE EQUITIES, INC. |
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May 3, 2004 |
By: /s/ JOEL S. MARCUS |
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Joel S. Marcus |
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Chief Executive Officer |
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(Principal Executive Officer) |
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By: /s/ PETER J. NELSON |
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Peter J. Nelson |
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Chief Financial Officer and Treasurer |
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(Principal Financial and Accounting Officer) |
EXHIBIT INDEX
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Exhibit Title |
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* Also provided in PDF format as a courtesy.
Exhibit 99.1
Contact: Joel S. Marcus
Chief Executive Officer
Alexandria Real Estate Equities, Inc.
(626) 578-9693
Alexandria Real Estate Equities, Inc.
Reports
First Quarter 2004 Results
- Company Reports Funds from Operations of $1.10 Per Share
(Diluted), Up 6%, and
Net Income Available to Common
Stockholders of 67 Cents Per Share (Diluted),
Up 29%, for First Quarter 2004 Over First Quarter 2003
- -
Highlights
- First Quarter 2004 Funds from Operations (FFO) of $1.10 Per Share (Diluted)
- First Quarter 2004 Total Revenues Up 7%, FFO Up 8% and FFO Per Share (Diluted) Up 6% Over First Quarter 2003
- First Quarter 2004 Net Income Available to Common Stockholders of 67 Cents Per Share (Diluted), Up 29% Over First Quarter 2003
- Executed 23 Leases for 295,000 Square Feet of Space
- Closed Sale of 42,000 Square Foot Office Property in Suburban Washington D.C.
- Closed $38 Million Fixed Rate Loan
PASADENA, CA. - May 3, 2004 -- Alexandria Real Estate Equities, Inc. (NYSE: ARE) today announced operating and financial results for the quarter ended March 31, 2004.
For the first quarter of 2004, Alexandria reported FFO of $21,469,000, or $1.10 per share (diluted), on total revenues of $42,775,000, compared to FFO of $19,840,000, or $1.04 per share (diluted), on total revenues of $40,039,000 for the first quarter of 2003. Comparing the first quarter of 2004 to the first quarter of 2003, total revenues increased 7%, FFO increased 8% and FFO per share (diluted) increased 6%. FFO is a non-GAAP measure widely used by publicly- traded real estate investment trusts. A reconciliation of FFO to GAAP net income is included in the financial information accompanying this press release. Net income available to common stockholders for the first quarter of 2004 was $13,115,000, or 67 cents per share (diluted), compared to net income available to common stockholders of $9,924,000, or 52 cents per share (diluted), for the first quarter of 2003. Net income for the first quarter of 2004 includes a gain on sale of property aggregating $1,627,000, while net income for the first quarter of 2003 includes a loss on sale of property aggregating $455,000.
(more)
ALEXANDRIA REAL ESTATE EQUITIES, INC. REPORTS FIRST QUARTER 2004
RESULTS
Page 2
The Company announced that it had executed a total of 23 leases during the first quarter of 2004 for approximately 295,000 square feet of space at 14 different properties (excluding 16 month-to-month leases for approximately 61,000 square feet which were effective during the quarter). Of this total, approximately 133,000 square feet were for redeveloped, developed or previously vacant space at eight properties, approximately 112,000 square feet of which were delivered from the Company's redevelopment or development programs, with the remaining approximately 21,000 square feet for previously vacant space. The remaining approximately 162,000 square feet were for new or renewal leases related to previously leased space. Rental rates for new or renewal leases were on average approximately 11% higher (on a GAAP basis) than expiring leases.
The Company announced the closing of the sale in February 2004 of an office property containing approximately 42,000 square feet in Suburban Washington D.C. at a gain of approximately $1.6 million. The Company also announced the closing of a secured debt financing for $38 million in March 2004. The debt bears interest at 5.82%, is payable based on a 28-year amortization schedule, and is due in 2016.
Based on the Company's current view of existing market conditions and certain current assumptions, the Company has updated its prior earnings guidance:
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2004 |
2005 |
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Fully diluted net income per common share * |
$2.45 |
$2.82 |
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Fully diluted FFO per common share |
$4.48 |
$4.73 |
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* excludes gains or losses on sales of real estate |
In providing this guidance, the Company stated that its Series A preferred stock may be redeemed on or after June 14, 2004. The write-off of offering costs in connection with any assumed redemption of this preferred stock, if at all, has not been considered or reflected in the guidance set forth above.
Alexandria Real Estate Equities, Inc. is a publicly-traded real estate operating company principally focused on the ownership, operation, management, acquisition, expansion and selective redevelopment and development of properties containing office/laboratory space. Such properties are designed and improved for lease primarily to pharmaceutical, biotechnology, life science product and service companies, not-for-profit scientific research institutions, universities and related government agencies. Alexandria's portfolio currently consists of 89 properties comprising approximately 5.7 million square feet of office/laboratory space.
This press release contains forward-looking statements within the meaning of the federal securities laws. The Company's actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the Company's Form 10-K Annual Report and other periodic reports filed with the Securities and Exchange Commission.
(Tables follow)
Alexandria Real Estate Equities, Inc. and Subsidiaries
Financial Information
(Unaudited)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Three Months
Ended Ended
March 31, 2004 March 31, 2003
-------------- --------------
Income statement data
Total revenues $ 42,775 $ 40,039
Expenses
Rental operations 8,735 8,576
General and administrative 3,636 3,549
Interest 6,709 6,871
Depreciation and amortization 9,981 9,374
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29,061 28,370
Income from continuing operations 13,714 11,669
Income from discontinued operations, net 1,626 480
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Net income 15,340 12,149
Dividends on preferred stock 2,225 2,225
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Net income available to common stockholders $ 13,115 $ 9,924
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Weighted average shares of
common stock outstanding
-Basic 19,206,954 18,895,821
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-Diluted 19,584,003 19,136,372
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Net income per common share
-Basic
Income from continuing operations $ 0.71 $ 0.62
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Income from discontinued operations, net $ 0.08 $ 0.03
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Net income $ 0.80 $ 0.64
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Net income available to common stockholders $ 0.68 $ 0.53
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-Diluted
Income from continuing operations $ 0.70 $ 0.61
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Income from discontinued operations, net $ 0.08 $ 0.03
============== ==============
Net income $ 0.78 $ 0.63
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Net income available to common stockholders $ 0.67 $ 0.52
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Alexandria Real Estate Equities, Inc. and Subsidiaries
Financial Information
(Unaudited)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Three Months
Ended Ended
March 31, 2004 March 31, 2003
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Funds from operations (1)
Net income $ 15,340 $ 12,149
Add
Depreciation and amortization (2) 9,981 9,461
Subtract
Dividends on preferred stock (2,225) (2,225)
(Gain) loss on sales of property (3) (1,627) 455
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Funds from operations (FFO) $ 21,469 $ 19,840
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FFO per common share
-Basic $ 1.12 $ 1.05
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-Diluted $ 1.10 $ 1.04
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Reconciliation of net income available to common
stockholders per share (diluted) to FFO per
common share (diluted)
Net income available to common stockholders per
share (diluted) $ 0.67 $ 0.52
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Depreciation and amortization per common share (2) $ 0.51 $ 0.49
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(Gain) loss on sales of property per common share (3)$ (0.08) $ 0.02
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FFO per common share (diluted) $ 1.10 $ 1.04
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As of As of
March 31, 2004 March 31, 2003
Balance sheet data -------------- --------------
Rental properties, net $ 1,016,385 $ 974,015
Total assets $ 1,294,820 $ 1,211,291
Total liabilities $ 783,096 $ 723,599
Stockholders' equity $ 511,724 $ 487,692
- GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the mis-correlation between real estate values and historical cost accounting for real estate assets, the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") established the measurement tool of funds from operations ("FFO"). Since its introduction, FFO has become a widely used non- GAAP financial measure by REITs. We believe that FFO is helpful to investors as an additional measure of the performance of an equity REIT. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its April 2002 White Paper (the "White Paper") and related implementation guidance, which may differ from the methodology for calculating FFO utilized by other equity REITs, and, accordingly, may not be comparable to such other REITs. The White Paper defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. While FFO is a relevant and widely used measure of operating performance of REITs, it should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance, or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions. We believe that net income is the most directly comparable GAAP financial measure to FFO.
- Includes depreciation and amortization on assets "held for sale" reflected as discontinued operations (for the periods prior to when such assets were designated as "held for sale").
- (Gain) loss on sales of property relates to the disposition of a property in the Suburban Washington D.C. market during the quarter ended March 31, 2004 and the disposition of a property in the San Francisco Bay market during the quarter ended March 31, 2003. (Gain) loss on sales of property is included on the income statement in income from discontinued operations.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Supplemental Financial Information
(Dollars in thousands, except per share data)
(Unaudited)
Quarterly Supplemental Financial Information
For the Three Months Ended
3/31/2004 12/31/2003 9/30/2003 6/30/2003 3/31/2003
Operational data ----------- ----------- ----------- ----------- -----------
Breakdown of Revenues from Continuing Operations (a)
Rental Income $ 33,774 32,686 31,258 31,248 31,222
Tenant Recoveries 8,314 7,645 8,122 7,830 8,479
Other Income 687 648 705 377 338
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Total $ 42,775 40,979 40,085 39,455 40,039
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Funds from Operations Per Share - Diluted (b) $ 1.10 1.08 1.06 1.05 1.04
Dividends Per Share on Common Stock $ 0.60 0.58 0.56 0.53 0.53
Dividend Payout Ratio (Common Stock) 54.2% 53.1% 52.6% 50.5% 50.8%
As of
3/31/2004 12/31/2003 9/30/2003 6/30/2003 3/31/2003
Other data ----------- ----------- ----------- ----------- -----------
Number of Shares of Common Stock Outstanding
at end of period 19,378,282 19,264,023 19,161,756 19,058,773 19,006,223
Number of Properties (c)
Acquired/completed during period 1 3 -- -- 1
Sold/reconstruction during period (1) (1) (1) -- (2)
Owned at end of period 89 89 87 88 88
Square Feet (c)
Acquired/completed during period 103,816 215,824 -- -- 51,340
Sold/reconstruction during period (42,142) (171,475) (96,500) -- (70,281)
Owned at end of period 5,744,112 5,682,438 5,638,089 5,734,589 5,734,589
- The historical results above exclude the results of assets "held for sale" which have been reflected as discontinued operations.
- The White Paper on Funds from Operations ("FFO") issued by the Board of Governors of the National Association of Real Estate Investment Trusts in April 2002 defines FFO as net income (loss), computed in accordance with generally accepted accounting principles, excluding gains or (losses) from sales, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. See page 4 for a reconciliation of FFO for the first quarter of 2004 to net income, the most directly comparable GAAP financial measure.
- Includes assets "held for sale" during the applicable periods such assets were "held for sale".
Alexandria Real Estate Equities, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(DOLLARS IN THOUSANDS)
March 31, December 31,
2004 2003
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Assets
Rental properties, net $ 1,016,385 $ 982,297
Properties under development 131,955 153,379
Cash and cash equivalents 4,356 4,985
Tenant security deposits and other restricted cash 13,909 11,057
Tenant receivables 2,504 1,969
Deferred rent 34,559 31,503
Investments 48,842 47,126
Other assets 42,310 40,261
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Total assets $ 1,294,820 $ 1,272,577
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Liabilities and stockholders' equity
Secured notes payable $ 355,898 $ 320,007
Unsecured line of credit and unsecured term loan 363,000 389,000
Accounts payable, accrued expenses and tenant
security deposits 50,717 43,408
Dividends payable 13,481 13,027
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Total liabilities 783,096 765,442
Total stockholders' equity 511,724 507,135
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Total liabilities and stockholders' equity $ 1,294,820 $ 1,272,577
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ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Debt
March 31, 2004
(Dollars in thousands)
(Unaudited)
Principal Maturities / Rates (1)
Weighted Average
Year Amount Interest Rates
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2004 $ 7,718 (2) 7.72%
2005 28,838 (3) 3.86%(3)
2006 26,190 7.85%(3)
2007 15,738 7.78%
2008 38,505 7.20%
Thereafter 238,688 7.07%
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Subtotal 355,677 6.93%
Unamortized Premium 221 ==============
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Total $ 355,898
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Secured and Unsecured Debt Analysis
Weighted Average Weighted
% of Effective Average
Balance Balance Interest Rate Maturity
----------- ----------- -------------- -----------
Secured Debt $ 355,898 49.51% 6.93% 7.2 Years
Unsecured Debt 363,000 (4) 50.49% 2.63%(4) 3.4 Years
----------- ----------- -------------- -----------
Total Debt $ 718,898 100.00% 4.75% 5.3 Years
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Floating and Fixed Rate Debt Analysis
Weighted Average Weighted
% of Effective Average
Balance Balance Interest Rate Maturity
----------- ----------- -------------- -----------
Fixed Rate Debt $ 333,415 46.38% 7.20% 7.6 Years
Floating Rate Debt 385,483 (4) 53.62% 2.64%(4) 3.3 Years
----------- ----------- -------------- -----------
Total Debt $ 718,898 100.00% 4.75% 5.3 Years
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- Excludes our unsecured line of credit.
- Of this amount, $3,331,000 represents the outstanding balance of a loan maturing in August 2004 which will be paid down with proceeds from our unsecured line of credit.
- Of this amount, $22,483,000 represents the outstanding balance on a loan related to a property developed in the San Francisco Bay market, which has a maturity of January 2005, and may be extended, at our option, for an additional year. If we extend the maturity of this loan to 2006, the weighted average interest rates for 2005 and 2006 would be 7.17% and 5.57%, respectively.
- A portion of our floating rate debt is hedged by existing swap agreements (see page 8). The interest rate on floating rate debt shown above does not reflect the impact of such swap agreements.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Interest Rate Swap Agreements (1)
March 31, 2004
(Dollars in thousands)
(Unaudited)
Notional Effective at Interest
Transaction Dates Effective Dates Amounts March 31, 2004 Pay Rates Termination Dates
- --------------- ---------------- ----------- ------------- ----------- ----------------
Hedges for Unsecured Line of Credit
- --------------------------------
March 2002 December 31, 2002 $ 50,000 $ 50,000 5.364% December 31, 2004
July 2002 January 1, 2003 $ 25,000 $ 25,000 3.855% June 30, 2005
July 2002 January 1, 2003 $ 25,000 $ 25,000 3.865% June 30, 2005
December 2002 January 2, 2003 $ 25,000 $ 25,000 3.285% June 30, 2006
December 2002 January 2, 2003 $ 25,000 $ 25,000 3.285% June 30, 2006
November 2002 June 1, 2003 $ 25,000 $ 25,000 3.115% December 31, 2005
November 2002 June 1, 2003 $ 25,000 $ 25,000 3.155% December 31, 2005
March 2004 December 31, 2004 $ 25,000 $ -- 2.956% December 31, 2006
March 2004 December 31, 2004 $ 25,000 $ -- 2.956% December 31, 2006
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$ 200,000
Hedges for Unsecured Term Loan
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December 2003 December 31, 2003 $ 50,000 $ 50,000 1.53% December 31, 2004
December 2003 December 31, 2004 $ 50,000 $ -- 3.00% December 30, 2005
December 2003 December 30, 2005 $ 50,000 $ -- 4.15% December 29, 2006
December 2003 December 29, 2006 $ 50,000 $ -- 5.09% October 31, 2008
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$ 50,000
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Total Interest Rate Swaps in Effect at March 31, 2004 $ 250,000
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- For all interest rate swap agreements, interest is received based on one month LIBOR.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Operating Portfolio
March 31, 2004
(Dollars in thousands)
Number of Rentable Annualized Occupancy
Properties Square Feet Base Rent Percentage
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Markets
California - Pasadena 1 31,343 $ 526 63.3%(1)
California - San Diego 21 938,446 26,270 95.0%
California - San Francisco Bay 10 642,578 19,918 100.0%
Eastern Massachusetts 10 640,317 21,929 86.8%
New Jersey/Suburban Philadelphia 4 267,319 5,352 100.0%
Southeast 5 259,414 3,810 76.7%(1)
Suburban Washington D.C. 19 1,526,856 26,084 91.7%
Washington - Seattle 6 543,780 19,458 99.8%
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Total 76 4,850,053 $ 123,347 93.2%(2)
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- All, or substantially all, of the vacant space is office or warehouse space.
- Excludes occupancy at properties under full or partial redevelopment.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Same Property Comparisons
(Dollars in thousands)
(Unaudited)
GAAP Basis (1) Cash Basis (1)
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Quarter Ended Quarter Ended
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3/31/04 3/31/03 % Change 3/31/04 3/31/03 % Change
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Revenue (2) $ 34,198 $ 33,660 1.6% $ 32,298 $ 32,168 0.4%
Operating expenses 6,918 7,096 -2.5% 6,918 7,096 -2.5%
Revenue less ---------- ---------- --------- ---------- ---------- --------
operating expenses $ 27,280 $ 26,564 2.7% $ 25,380 $ 25,072 1.2%
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NOTE: This summary represents operating data for all properties that were owned and fully operating for the entire periods presented (the "First Quarter Same Properties").
- Revenue less operating expenses computed under GAAP is total revenue associated with the First Quarter Same Properties, as applicable, (excluding lease termination fees, if any) less property operating expenses. Under GAAP, rental revenue is recognized on a straight-line basis over the respective lease terms. Revenue less operating expenses on a cash basis is total revenue associated with the First Quarter Same Properties, as applicable, (excluding termination fees, if any) less property operating expenses, adjusted to exclude the effect of straight-line rent adjustments required by GAAP. Straight-line adjustments for the quarter ended March 31, 2004 and 2003 for the First Quarter Same Properties were $1,900,000 and $1,492,000, respectively. We believe that revenue less operating expenses on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates non-cash adjustments to rental revenue.
- Fees received from tenants in connection with termination of their leases, if any, are excluded from revenue in the Same Property Comparisons.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Leasing Activity
For the Quarter Ended March 31, 2004
Rental TI's/Lease Average
Number Square Expiring New Rate Commissions Lease
of Leases Footage Rates Rates Changes Per Foot Terms
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Lease Activity
Lease Expirations
Cash Basis 38 499,944 $21.17 -- -- -- --
GAAP Basis 38 499,944 $21.78 -- -- -- --
Renewed / Releasable Space Leased
Cash Basis 13 161,956 $22.35 $22.52 0.8% $4.25 4.7 years
GAAP Basis 13 161,956 $22.27 $24.69 10.9% $4.25 4.7 years
Month-to-Month Leases In Effect
Cash Basis 16 60,784 $21.24 $21.28 0.2% -- --
GAAP Basis 16 60,784 $22.27 $22.30 0.1% -- --
Redeveloped/Developed/
Vacant Space Leased 10 132,939 -- $19.58 -- $25.48 9.1 Years
Cash Basis 10 132,939 -- $28.73 -- $25.48 9.1 Years
GAAP Basis
Leasing Activity Summary
Excluding Month-to-Month Leases
Cash Basis 23 294,895 -- $21.20 -- -- --
GAAP Basis 23 294,895 -- $26.51 -- -- --
Including Month-to-Month Leases
Cash Basis 39 355,679 -- $21.21 -- -- --
GAAP Basis 39 355,679 -- $25.79 -- -- --
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Lease Expirations
March 31, 2004
Square Percentage of Annualized Base
Year of Number of Footage of Aggregate Rent of Expiring
Lease Leases Expiring Portfolio Lease Leases (per
Expiration Expiring Leases Square Feet square foot)
- --------- ---------- ---------- -------------- ----------------
2004 59 (1) 356,463 7.3% $24.21
2005 28 304,595 6.2% $28.70
2006 35 809,016 16.5% $24.55
2007 19 364,744 7.4% $23.69
2008 13 319,560 6.5% $28.13
- Includes 20 month-to-month leases for approximately 61,000 square feet.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Properties Under Development
March 31, 2004
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Estimated |
Total |
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In-Service |
Rentable |
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Markets |
Dates |
Square Footage |
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California - San Diego |
1Q05 |
45,000 |
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Southeast |
2Q05 |
96,000 |
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Suburban Washington D.C. |
4Q04 |
95,000 |
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Suburban Washington D.C. |
2Q05 |
73,000 |
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Washington - Seattle |
4Q04 |
62,000 (1) |
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Total |
371,000 |
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- Excludes certain portions of the property which were delivered to tenants effective 1Q04.
Our properties under development are ground-up development projects of office/laboratory facilities. As required under GAAP, interest is being capitalized on these projects, as activities are ongoing to bring the assets to their intended use.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Properties Under Redevelopment
March 31, 2004
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Estimated |
Total Rentable |
Total Square |
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In-Service |
Square Footage |
Footage Being |
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Markets |
Dates |
of Property |
Redeveloped |
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California - San Diego |
3Q05 |
17,590 |
17,590 |
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California - San Diego |
3Q05 |
71,510 |
71,510 |
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California - San Francisco Bay |
Various |
153,837 |
35,515 |
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California - San Francisco Bay |
1Q05 |
98,964 |
35,016 |
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California - San Francisco Bay |
3Q04 |
32,074 |
11,000 |
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Eastern Massachusetts |
1Q05 |
96,150 |
66,540 |
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Eastern Massachusetts |
3Q04 |
46,700 |
46,700 |
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New Jersey/Suburban Philadelphia |
4Q04 |
37,000 |
37,000 |
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New Jersey/Suburban Philadelphia |
2Q05 |
42,600 |
42,600 |
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Southeast |
Various |
119,916 |
42,912 |
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Suburban Washington D.C. |
2Q05 |
131,415 |
67,709 |
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Washington - Seattle |
TBD |
46,303 |
22,239 |
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Total |
894,059 |
496,331 |
Average occupancy for properties under full or partial redevelopment as of March 31, 2004 was approximately 44.5% and is not included in the occupancy of the operating portfolio. Our redevelopment program involves activities necessary for the permanent change of use of applicable redevelopment space to office/laboratory space. For properties undergoing redevelopment, the entire property is excluded from the operating portfolio and related statistics (e.g. occupancy information, same property performance, etc.). As required under GAAP, interest is capitalized on redevelopment properties on the basis allocable only to the portion undergoing redevelopment.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Summary of Capital Costs
For the Three Months Ended March 31, 2004
(Dollars in thousands)
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Property-related capital expenditures (1) |
$ 558 |
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Leasing costs (2) |
$ 114 |
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Property-related redevelopment costs (3) |
$ 19,228 |
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Property-related development costs |
$ 6,112 |
- Property-related capital expenditures include all capital expenditures except capital expenditures that are recoverable from tenants, revenue-enhancing capital expenditures or costs related to the redevelopment of a property. Capital expenditures fluctuate in any given period due to the nature, extent or timing of improvements required and the extent to which they are recoverable from tenants. Approximately 90% of our leases (based on rentable square feet) provide for the recapture of certain capital expenditures (such as HVAC systems maintenance and/or replacement, roof replacement and parking lot resurfacing). In addition, we implement an active preventative maintenance program at each of our properties to minimize capital expenditures.
- Leasing costs consist of tenant improvements and leasing commissions related to leasing of acquired vacant space and second generation space. Leasing costs exclude tenant improvements that are revenue-enhancing.
- Includes certain capital expenditures recoverable from tenants of approximately $952,000.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Conference Call Information
For the First Quarter Ended March 31, 2004
Alexandria Real Estate Equities, Inc. will be hosting a conference call to discuss its operating and financial results for the first quarter ended March 31, 2004.
Date: May 3, 2004
Time: 4:00 P.M. Eastern Daylight Time
Phone Number: (913) 981-5558
Confirmation Code: 713458